There was a time when it seemed that even energy hawks in the Conservative government might walk away from the proposed Northern Gateway pipeline, so politically fraught was its potential approval. From that perspective then, Ottawa's authorization of the project Tuesday is a notable milestone for Enbridge.
But there was surely little celebrating going on at head office in Calgary, as the company knows it still faces formidable obstacles in launching the project. That is also why the news was mostly greeted with a yawn inside the B.C. government, which has laid out five conditions that have to be met before it will sanction Gateway or any other heavy oil pipeline built in the province.
So far, only one of those five terms has been met.
There is no great secret about the work that still confronts Enbridge. It has to satisfy the 209 conditions that the National Energy Board attached to its conditional approval last year. And more than half of them have to be met before the company can even stick a shovel in the ground – which could take between 12 and 18 months.
This is important because it appears that a federal election will most likely be held before the project has any chance of commencing. The Liberals and New Democrats have already made their firm opposition to Gateway known, so one can only assume that if the Conservatives lose power the project will suffer a quick death.
It might have been harder to kill it had Enbridge already started construction.
(If this matter is still alive come the next national vote, it's not hard to imagine the Conservatives adopting a similar theme to the one the B.C. Liberals latched on to and rode to victory in the last provincial election. The Liberals cast themselves as a pro-resource, pro-jobs party, successfully portraying the anti-pipeline New Democrats as employment killers.)
There has been significant progress made by both Ottawa and Enbridge around the marine and land protection demands included in B.C.'s five conditions. But there have been zero negotiations around the B.C. government's insistence on a bigger slice of the financial benefits in exchange for the environmental risks the province is accepting. And those won't take place until Enbridge has some sort of deal with the First Nations communities along the route.
And that, clearly, is where this project is bogged down at the moment. The Haisla and Coastal First Nations have made their adamant opposition to the project known. They've made it clear it's not about money but about protecting their land and natural resources. It's hard to envision a scenario where these two proud aboriginal groups climb down from their positions, especially in exchange for a little more cash. The optics would not be pretty.
There are already matters related to the project before the courts, and Enbridge can't start construction until they are resolved. There are also more lawsuits likely to be commenced as a result of Tuesday's decision. Depending on how long this drags on, Enbridge's potential partners in this endeavour – the shippers, oil companies, Asian customers – could lose faith and walk away.
The one move that Enbridge could make to help quell First Nations opposition along the coast is to move the pipeline's terminus from Kitimat – where tankers would have to traverse waters along the ecologically pristine Great Bear Rainforest to get to Asia – to the deepwater port of Prince Rupert, where they wouldn't.
It is a more challenging route from a construction standpoint, and more costly too, but it could allay some of the aboriginal hostility towards the current route. It's understood this is an option that Jim Prentice suggested was possible when he was working on Enbridge's behalf with First Nations communities to find a solution that would see the project go ahead.
Environmental organizations also opposed to the pipeline haven't even begun to rev up their campaigns to see it stopped. Some have made it clear Gateway is a hill they are prepared to die on. With that much at stake, the efforts to block it could represent some of the most aggressive and relentless B.C. has ever witnessed – which in a province known for its environmental activism is saying a lot.
This is the last thing the B.C. government wants – the spotlight trained on the conflict around Gateway. It is worried there could be a spillover effect on its own sensitive negotiations around liquefied natural gas development in the province.
As much as Ottawa, Enbridge and the B.C. government hope this file goes quiet for the next while as the company tries to find a pathway to tidewater, it's highly unlikely that is going to happen. In fact, on many fronts the fight over Gateway is just beginning.